In the slower market you need an estate agent who will really work for you

MORE THAN ever vendors are desperately seeking a professional, effective, marketing and selling service. But many of our frazzled estate agents accused of not being up to the job claim vendors expect miracles in this market.

Certainly miracles are required if prices remain at the expectation level of 2008. And, given the performance of the market over the last year, all asking prices are in need of downward revision.

The financial market free fall has put many vendors under serious pressure to sell now. Their homes may have languished for a year or more in a falling market where capital values plummeted and funding sources for buyers dried up, exacerbating an already torturous saga. But they cannot afford that debatable luxury any more.

But nothing will change unless vendors accept market realities and lower their asking prices. Equally, some agents must resist being too fearful of telling vendors the real truth about the market, opting to “hand hold” and consume more “humble pie”.

“After all,” one agent despaired, “we were the ones who told them to buy it, or advised them to seek the initial selling price which is now significantly reduced and about to drop further.”

Some vendors also complain that agents are not “inventive” enough, nor are they sufficiently experienced in selling property in a type of marketplace not seen in this country for more than a decade. “They were used to getting money for old rope, all they had to do was open the front door and a property was sold,” one disgruntled vendor complained, adding “now they have to chase buyers, cajole, be available at all hours and work 500 per cent harder to sell a property that would have walked out the door three years ago. They are not used to that.”

No more the speedy deals or quick buck turnarounds witnessed regularly throughout the boom. Frantic auctions, massive auction marketing campaigns and homes selling for twice their guideline prices are relics of another era.

About 25 per cent of the estate agents countrywide have been made redundant or will face it over the next few months. And their fees, currently charged at between 1.5 and 2 per cent, are not going to increase along with their workload even though Irish estate agency fees have been at the bottom of the international table in percentage terms for many years. That said, there are few empathising with agents’ plight believing, rightly or wrongly, that most of them “made a fortune” in the boom time.

After the hammering auctions took last year – lots fell to just 9 per cent of what they were at the peak of the boom in 2006 – few will cheerily embark on this costly method of sale. Those that do will be concerned that would-be buyers may have difficulty organising finances within the typical 21-day auction campaign period.

And, given that most surveys indicate a further drop in values (at least in the first half of 2009), it is likely that guide prices (or the replacement advised minimum values) will experience a downward spiral.

If buying or selling a home is one of the four most stressful experiences (after death, divorce, and giving birth), then over the last decade buyers were the true sufferers. But now the mantle has passed to the seller and no chalice could be more poisoned. And that is before vendors consider the new Building Energy Rating (BER) certificates which are now legally required.

Consequently, 2009 will probably go down as the year when it was most difficult to close a deal and rarely at the anticipated price, especially as market confidence remains poor. But many property owners simply cannot wait until the marketplace steadies and begins to gain momentum again. For those in this position there is no time for guesswork.

“No agent can sell a property with an unrealistic asking price but equally important is an agent who knows what properties in their area are fetching, not merely what is being asked of them,” says Alan Cooke of the Irish Auctioneers Valuers Institute.

“IAVI members are obliged to confirm fee arrangements in writing and vendors should insist that an agent outlines in writing exactly what they propose to do in terms of marketing. If you are under pressure to sell there is no point in asking an unrealistic price.”

In areas where several agents are experienced in the market it is often best to invite up to four different agencies to compete for the business.

“Don’t discount the agent that gives you the lowest value, but don’t necessarily go for the one offering to obtain the highest figure; in fact treat them with more caution,” says Fintan McNamara of the Institute of Professional Auctioneers and Valuers, “and consider carefully the method of sale: private treaty is preferable to auction in this market.”

Having interviewed interested agents the vendor will be in a better position to choose which suits best. Often sellers get a “gut feeling” that directs them or a sense of “this is the one that will sell my house”.

Avoid the “youngest kids on the block”, says Peter Stapleton, vice president of the Society of Chartered Surveyors and a director of Lisney. “A few grey hairs are not a bad thing,” he adds, “if it indicates a depth of experience and capability of delivering good advice.”

Keep an inquisitive eye on the brochure and pictures used. The owner knows which pictures best reflect the style of the home. And don’t be afraid to ask what extras you can be given, such as priority viewing with an experienced agent, or a reduction on the advertising rates. Equally ask each agent about their experience and sales record of your type with property and in your location.

So what are their tricks of the trade? One Blackrock vendor recently changed from one big agency to another big agency, slashed his price further and had more viewings in one week than in the previous seven months. He is hopeful of a successful sale shortly and credits this success to his new agent “a wonderful sales woman” who sold most of the homes in and around his territory.

When asked why he did not choose that agent in the first place he replied that he did not “take to” the previous agent of the firm who was since replaced with the “wonderful sales woman”.

Many astute agents are also removing properties on their books, unless the vendor is prepared to slash their prices. “We don’t have the staff or the resources to be servicing all these homes which have not a hope of selling at the vendor’s expected sales figure. It’s cut and dried – be realistic or be unsold,” says Eddie Barrett, an estate agent in Tralee.

Just as obvious, especially with such an oversupply, is a property’s “kerb” appeal. A potential buyer will be put off by untidy gardens, peeling paintwork, and so on, while obvious interior defects should also be resolved.

“That is not to say a property should be redecorated or a conservatory added to help it sell. Basic housekeeping and good general maintenance with regard to the roof, wiring, plumbing, etc, is essential,” says Neil Harper of Harper O’Grady in Dublin 6.

No one can guarantee a sale in today’s market but making the property presentable, choosing the right agent and the right asking price, are three important steps on the way to a successful sale. Stamp duty and fees are lower so, for those who can sell and get mortgage finance, now is the time to move.

How to change your agent

So, you have just about had it with your particular estate agent. Tormented by phone calls not being returned, ever decreasing viewings, ever increasing advertising costs and, above all, no result, you are forced to reconsider.

Sometimes it is best to change estate agents but to avoid any haggles prior to a closing it is best to formally sack your initial agent prior to appointing another.

This can be done via a solicitor's letter which should also seek a list of parties who have been in discussion with the current agent (agent A) in respect of the property. This can be a contentious issue as agent A may feel that he is actually providing his competition, agent B, with a valuable list of potential buyers and their requirements.

The general idea is that this list would make clear that, in the event that someone on the list ultimately buys the property from agent B, you agree a fee by arrangement between both agents prior to its sale. Ideally the vendor should only pay one fee.

Simon Ensor of Sherry FitzGerald in Dublin says that such lists are seldom provided. "Instead, agents who are about to be fired frantically contact all their potential buyers to conclude a sale rather than provide lists," he says. Des Purcell of Purcell Properties in Waterford suggests that a sealed envelope containing the agent's list of potential buyers be signed and dated by agent A and vendor. The envelope is retained by agent A until after the eventual sale when fees, previously agreed prior to the sale, can be dispensed if the ultimate buyer's name is on the list.

Before changing agents, all agent A's outline expenditure – including advertising and marketing – should be settled and the sign removed from the property. Removal of all internet and other advertising must also be undertaken before appointing new agents.

Alan Cooke, CEO of the Irish Auctioneers Valuers Institute, says: "If your property has stagnated in the market then withdraw it for a period, take an overview based on advice from a competent agent and re-enter the market after eight to 12 weeks with a mindset to do business."